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Campbell Brown

President Obama Hosts Congressional Leaders at White House; Cutting Through the Pork

Aired March 04, 2009 - 20:00   ET


CAMPBELL BROWN, CNN ANCHOR: Hey there, everybody.

Moments ago, we heard from President Obama as he welcomes friends and rivals to the White House. We're going to have that for you in a moment.

But we begin with something we have not been able to show you for sometime. It is good news. Take a look. The Dow closed up today. It broke its five-day losing streak, soaring throughout the day, ending nearly 150 points higher. No, it didn't quite get back to the 7000 mark, but, Still, nice to see things looking up a bit, no doubt a welcome relief for President Obama, who at this moment is again welcoming top congressional leaders, along with Cabinet members, to a dinner at the White House.

And bullet point number one tonight is this. Though it is a social occasion at the White House, you can bet there is one clear message. The president is facing pushback from Republicans and even some members of his own party when it comes to government spending.

Here's the president. We have got him now from just a few moments ago.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Obviously, the country's going through an extraordinarily difficult time. And we are going to have some monumental debates taking place over the next several months and years.

We also know that we're not always going to agree on everything. But given how hard so many of you are working on both sides of the aisle, day in, day out, we thought it was important for us to be able to step back for a moment, remind ourselves that we have things in common, family, friends, laughter. And hopefully we will have a chance to appreciate each other a little bit, take a time-out, before we dive back into the game.


BROWN: And, again, that was the president just moments ago. We're going to have more on what was happening behind the scenes at that dinner in a second.

Bullet point number two tonight: President Obama's housing plan, his solution to America's foreclosure epidemic, $75 billion to help nine million of you save your homes. But the question everybody is already asking is, which families get rescued, which do not? At NO BIAS, NO BULL, we want to know how these decisions get made. Is the system really fair? We're going to break that down for you tonight.

And bullet point number three: "Cutting Through The Bull" on all those billions of dollars worth of notorious earmarks that could soon be headed for the president's desk. We can't help but ask, what is Congress thinking, especially since, just today, the president sent exactly the opposite message, promising he will slash the deficit by $40 billion, starting with those fat defense contracts.



OBAMA: And this wasteful spending has many sources. It comes from investments in unproven technologies. It comes from a lack of oversight. It comes from influence-peddling and indefensible no-bid contracts that have cost American taxpayers billions of dollars.

In Iraq, too much money has been paid out for services that were never performed, buildings that were never completed, companies that skimmed off the top. At home, too many contractors have been allowed to get away with delay after delay after delay in developing unproven weapons systems.

It's time for this waste and inefficiency to end. It's time for a government that only invests in what works.


BROWN: So, if the president is out to cut wasteful spending, why is Congress still padding the budget with so much pork? We're going to talk about that tonight.

But we do start with the breaking news, at the White House, President Obama hosting a dinner with congressional leaders as we speak to talk about spending.

Minutes ago, as you just heard, the president reminded his guests to think about what they have in common. This morning, Mr. Obama spelled out some of his budget goals for the years to come.


OBAMA: We must also turn the tide on an era of fiscal irresponsibility so that we can sustain our recovery, enhance accountability, and avoid leaving our children a mountain of debt.

And that's why, even as we make the necessary investments to put our economy back on track, we're proposing significant changes that will help bring the yawning deficits we inherited under control. We are cutting what we don't need to make room for what we do.

The budget plan I outlined last week includes $2 trillion in deficit reduction. It reduces discretionary spending for non-defense programs as a share of the economy that -- by more than 10 percent over the next decade to the lowest level in nearly half a century.


BROWN: Tonight, some of President Obama's fellow Democrats don't think he really means that. Fourteen Democratic senators met yesterday, ready to put pressure on the president to cut back spending, starting with this year's $410 billion spending bill stuffed with earmarks.

We want to ask our political panel tonight, does this Democratic pushback mean trouble for the president?

And with me to talk about that, CNN senior political analyst Gloria Borger, Tony Blankley, author of bestseller "American Grit: What It Will Take to Survive and Win in the 21st Century," and CNN political analyst Roland Martin.

So, Gloria, we're used to hearing Republicans complaining about overspending, but now you have got big-name Democrats speaking out about this. What's going on here?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, they have got sticker shock, Campbell.

You have got a group of moderate Democrats in the Senate who come from some states that are pretty conservative when it comes to spending, and they're looking at a $1.5 trillion budget deficit. They're looking at new taxes. They're looking at a health care plan yet to be written that's going to be quite expensive, funded in part by these new taxes.

And they're thinking, how can we have input into this political process to kind of rein in a little bit of the spending? And one way they can do that is to band together with perhaps some moderate Republicans, because, as you know, Campbell, you need 60 votes in the Senate to get anything done. So, they could provide some real trouble for President Obama.

BROWN: Roland, the bill we're talking about here includes 8 percent spending increases. I mean, this is virtually across the board. And in an op-ed today, Indiana Senator Evan Bayh writes -- quote -- "Such increases might be appropriate for a nation flush with cash or unconcerned with fiscal prudence, but America is neither."

And, Roland, this is coming from a Democrat.

ROLAND MARTIN, CNN CONTRIBUTOR: Of course, but I would love to see these same Democrats have the courage to actually stand up, look their fellow senators in the eye, Democrats and Republicans, and say, OK, let's get rid of your particular project.

What often happens in Congress is, they complain in terms of the general. Oh, we don't like all of these earmarks and the spending. But they don't want to look each other in the eye and say, your particular projects, because you know what? That particular person may have one that comes down later down the road. The bottom line is, these 14 Democrats are flexing their muscle.

And, look, the...


BROWN: But let me go back to your earlier point, Roland, because Bayh's talking about the overall budget. He's not talking specifically about earmarks here.

MARTIN: Oh, no, no, no, no, no. But, again, though, but, see, you might have an earmark, but also there are members of the Senate who have particular interests.

There are those who will focus on health care and education. And what I'm saying is, they often are unwilling to challenge one another because it's such a nice little close body. And what I am saying is, call them out. Put it on the table. You want to be transparent? Tell us exactly what you want to cut and who are the ones requesting additional dollars...


BORGER: I think they will do that.

MARTIN: Well, I'm not necessarily sure they're willing to go that far.

BROWN: Well, Tony, to Gloria's point that she made a moment ago, you know, if you have got these moderate Democrats and moderate Republicans on Capitol Hill willing to ban together to oppose this, what does that really mean for the White House?

TONY BLANKLEY, REPUBLICAN STRATEGIST: Well, it's early in the process to figure out, will these Democrats vote with the Republicans to sustain a filibuster, if it comes to that, or are they just positioning themselves early on in the process to try to get some small modifications?

We don't know yet. It's very unusual for members of either party to vote with the other party on a procedural vote like a filibuster, like a -- and a cloture vote. So, I don't know yet how serious a threat this is to the president.

BORGER: Campbell, I spoke with one of these moderate Democratic senators today, who is really worried that, while the White House has said we're not using rosy economic forecasting, you know, their forecast says, for example, that the economy will only shrink 1.2 percent this year.

And they're afraid that it's actually going to shrink by more than that, and that that will make the numbers even worse and the deficit even larger. So, you know, they're worried that this could spiral out of control.


BROWN: Let me switch gears.


BROWN: Yes, go ahead, quickly, Roland.

MARTIN: No, go ahead. Go ahead.


MARTIN: No, the real trouble I think is going to be with Nancy Pelosi, the speaker of the House.

Again, you talk about the White House, but the House not particularly happy with the stimulus package, having to bend to the will of the Senate. That's going to be, I think, an even bigger fight, because of how the House Democrats respond to this.

BROWN: Let me get your take, Roland, on something else that is getting a lot of attention today.

You had Rush Limbaugh basically throwing down the gauntlet, pretty much challenging the president to a duel.

Listen to what he said.


RUSH LIMBAUGH, RADIO TALK SHOW HOST: So, let's have the debate. I am offering President Obama to come on this program without staffers, without a teleprompter, without note cards, to debate me on the issues.

Let's talk about free markets vs. government control. Let's talk about nationalizing health care and raising taxes on small business.


BROWN: So, Roland, what do you think?

MARTIN: Two words: Who cares?

Rush Limbaugh is a radio talk show host. I host a three-hour radio show in Chicago. I try to challenge the mayor of Chicago all the time to come on the radio show. That's what we do.

The bottom line is, the president's not going to do it. This is not like during the Clinton administration, when you had Speaker of the House Newt Gingrich who was challenging Bill Clinton to talk about policy. He's a radio talk show host. He's an entertainer.

The bottom line is, Rush is driving up his ratings. It sounds nice and cute. We can keep talking about it.

BROWN: Right.

MARTIN: But he is absolutely irrelevant when it comes to policy. BROWN: And, Tony, we know you're a Rush fan.


BROWN: But explain to us again why this helps the Republican Party.

BLANKLEY: Well, actually, I wanted -- I think this story has taken a different twist today with the "Politico" story, presumably sauced by the White House or by Carville or Begala or somebody.

The "Politico" story said that this has been a project to demonize him. That was the word that was used in the "Politico" story, to demonize...

MARTIN: That's not a new story.

BLANKLEY: It was a "Politico" -- it was a new story at "Politico." You had quotes from the chief of staff to the president of the United States, saying they have been waiting to try to get him and demonize him.

You have the president's own words a week or two ago when he talked about people should stop watching him. If this were a Republican administration, if Karl Rove were being quoted trying to demonize a prominent Democratic liberal, I think you would have a scandal on your hands.


MARTIN: It happens all the time, Tony.


BLANKLEY: And them going out on "Politico" and bragging about it strikes me as...


BROWN: Tony's right.


BROWN: There's no question Democrats are pushing the story.

BORGER: Oh, yes.


MARTIN: They have been demonizing Rush for 10 years. This is not new.


BLANKLEY: Well, the "Politico" thought it was big enough to be the biggest story, news story of the day. You have quote from Rahm Emanuel himself, talking about the intent to demonize a very prominent private citizen, Rush Limbaugh. I don't think that's a giggling story.


BROWN: Gloria, you go ahead. Last word.

BORGER: There's no doubt that this works for the Democrats or Rahm Emanuel wouldn't have come out last Sunday and talked about Rush Limbaugh being the de facto leader of the Republican Party.

They're trying to point to the vacuum of leadership at the top of the Republican Party, which happens to any party when it's out of power and doesn't have the presidency.

BLANKLEY: This is much closer to the Nixon enemies list than it is to a giggling...


MARTIN: Oh, Tony.

BROWN: All right. OK.


BLANKLEY: I'm sorry. I don't believe the media would cover this story the same way...


MARTIN: Republicans demonize "The New York Times."


MARTIN: Democrats demonize Rush. That's what they do. Stop it.

BROWN: And on that note, thank you.

Roland, Tony, Gloria, appreciate it, as always, guys.

BROWN: And we are "Cutting Through The Bull," a bit of pork while we're at it. We're talking about real pigs here. On the same day the president declares the end of waste in one important area, why is Congress getting ready to send him more than 8,000 earmarks, including money for research into pig manure, as ransom for keeping the government running?

That when we come back.


BROWN: We're "Cutting Through the Bull."

And while the president took aim today at cutting up to $40 billion of waste, Congress just doesn't seem to get the message that it is time for serious belt-tightening on the Hill as well.

First, though, listen to the president as he railed today on abuse by the defense industry contractors, something he vows to overhaul by September.


OBAMA: But I reject the false choice between securing this nation and wasting billions of taxpayer dollars.

Last year, the Government Accountability Office, GAO, looked into 95 major defense projects and found cost overruns that totaled $295 billion. Let me repeat: That's $295 billion in wasteful spending.

No more excuses. No more delays. The days of giving defense contractors a blank check are over.


BROWN: Now contrast that with just some of the pork inside the $410 billion emergency spending bill that was merely supposed to keep the government operating after next week, nearly a quarter-million for the Polynesian Voyaging Society of Hawaii, nearly $2 million for swine odor and manure management research in Iowa, and close to half a million to build an Indiana heritage center in Alaska, complete with a bald eagle observatory.

Now, Senator Tom Harkin, the one pushing the pig waste project, is sticking up for the spending, saying that, in Iowa's case, it's more than just fodder for late-night comedians. Here he is defending his earmark.


SEN. TOM HARKIN (D), IOWA: You might have people living in a small town. They're elderly. Their life savings are in their homes and maybe that little half-acre they have or quarter-acre or whatever they might be living on. And, all a sudden, because of a huge swine operation five miles away and the prevailing winds blowing that way, who wants to buy that house?


BROWN: Now, that may be true, but so is this: The arrogance of Congress more generally, keeping more than 8,000 earmarks glued to a bill that has nothing to do with any of them stinks almost as badly. The president trying to save his political capital for bigger battles will likely bite the bullet, hold his nose, and sign this thing.

While it's fair to criticize the president after he campaigned on a promise to end earmarks in spending, it's important to remember who put him in that position this time around.

It may only add up to a measly $7 billion and change in additional taxpayer money, but, when every penny counts, Congress would be well-served to see which way the winds are blowing when it comes to the anger of voters.

So, fighting to save your home? Well, the president today offered up details of his $75 billion plan to stop foreclosures and to keep families in their homes. But we have been bombarded with viewers asking us, whose home gets saved, whose does not? We're going to break that all down for you, NO BIAS, NO BULL -- when we come back.


BROWN: It is the American dream, owning your own home. But, for too many Americans, that dream has clearly turned into a nightmare, a nightmare President Obama hopes to end, starting now.

Today, the White House rolled out the welcome mat, spelling out the details of the government's program to help stop foreclosures and help millions of Americans stay in their homes.

The news helped Wall Street climb into positive territory today for the first time in a week.

And our Tom Foreman is down in Washington breaking it down for us tonight -- Tom.

TOM FOREMAN, CNN CORRESPONDENT: Well, Campbell, everybody wants to know if they're going to get some help.

And there's two groups are being targeted here, first, the about five million people who right now cannot refinance and take advantage of lower interest rates because the value of their homes has dropped so much, they just can't qualify for the new loan, or they're stuck paying off the old one, even though it's worth more than the home itself. That's where they are right now, and they can't get any help.

If you think that's you, this is what the Treasury Department says must be true for you to get help. First of all, this must be your primary residence, not an investment property or a second home.

Two, your loan must be guaranteed by Fannie Mae or Freddie Mac. If you don't know, your bank does. Call them. They will be able to tell you. Three, you must still be making payments, no matter how hard it has been. And, four, your house's value must be about the same or a bit lower than it was when you bought it, not way below, because the government does not want to take on hopeless cases.

But if all of that applies, you might be able to refinance. Give your bank a call. You might qualify for this refinancing at a lower late. And it might bring your payments down, too, Campbell. That's one option.

BROWN: Well, Tom, if the first group is all of those people who have seen their home values fall, I am guessing the second is people who are just in danger of defaulting on their loans.

FOREMAN: Yes, that's right, Campbell.

And that's about four million people as far as we can tell right now, four million people who are out there who have some reason that they might be in trouble. Maybe they bought one of those adjustable- rate loans or they lost jobs or something like that, and now they're on the brink of missing their payments, losing their homes. They need their funds fundamentally modified.

This is a bigger step. The interest rates need to be lowered, the life of the loan extended. That's what they're looking for, up to maybe 40 years. So, do you think you qualify for this? Well, let's look again at the Treasury guidelines.

One, once again, this must be your primary residence. Two, the amount you owe on this house must be less than $730,000, right about there. If you have got a million-dollar house out there or even approaching that, you're not going to get any of this help from the government.

Number three, you have to be able to produce the paperwork to show that you're having real trouble paying your mortgage. Here's a rule of thumb. If more than a third of your income is going to house payments, that's a sign of real trouble, because that probably means you don't have enough money for gas and clothing and food and other things, too.

And, four, you had to take this loan out before the start of 2009. You can't just come jumping in now and say, I have got a problem; help me out. There are a lot of details in this. But if you meet all of these broad guidelines, whether it's for modification or refinancing, as we mentioned earlier, give your bank a call and then be patient, because all of this is new for them, too, and working it out could still take a while -- Campbell.

BROWN: All right, Tom Foreman explaining it all for us tonight -- Tom, thanks very much.

We know that's a lot of information for you to absorb. So, if you have question, the government has set up a Web site where you can get answers. Go to and check it out.

You know, one of the reasons President Obama wants to get this off the ground pronto is, get this, according to the Center for Responsible Borrowing, a home is foreclosed on every 13 seconds.

So, is this plan fair? Will it actually help?

Here to break that part of it down, global investment strategist Maria Fiorini Ramirez and "Fortune" magazine editor Andy Serwer with us tonight.

So, Andy, bottom-line it. Is this going to help more people keep their homes?


The White House is suggesting nine million people, that five plus four million that Tom was talking about. So, it may not quite be that many, but, certainly, millions of people are going to be eligible and try.

And one small silver lining already that we're hearing about is that banks, because of the details of this plan, have said they're going to hold off foreclosing any homes until the plan goes into effect. So, really, foreclosure proceedings in this country in large part will have ceased because of the announcement of the plan. And that's good news.

Maria, you know, a lot of people say until the housing crisis is fixed, the economy's not going to improve; it's not going to get any better. This plan cost $75 billion. And we spent almost 10 times that on banks and on the car companies. Should we be spending more on homeowners?

MARIA FIORINI RAMIREZ, GLOBAL INVESTMENT STRATEGIST: Well, we should have been spending more on homeowners all along.

When you think of the overall commitment so far is $10 trillion. So, $75 billion is like a drop in the bucket. I mean, not all the $10 trillion Of course has been spent. Only a few have, but we're talking about big numbers.

And I think, you know, housing was the initial problem two years ago. It still is. There are so many ancillary problems that go with it. But to the extent that we Could stabilize housing prices and home values and consumer confidence, and, you know, prevent more foreclosures, I think That we're going down the right direction.

You know, this is not the final thing. I think this is a work in progress.


BROWN: Right. And not everybody loves it, or at least what we're learning about it so far, Andy.


BROWN: There's a new Quinnipiac poll out that says 68 percent of Americans -- 68 percent -- say it's unfair.

What do you say to those people who did everything right? They paid their mortgage, they followed the rules, they were in on time, and they're looking at this like, what's going on here?

SERWER: Right.

Well, to them, I would say two things, Campbell. First of all, this is not a bailout. If you listen to what Tom was saying, it really spells out that these people that they're advancing money to, that they're going to aid in terms of refi-ing and modifying, these are responsible people who for the most part have been paying their mortgages and also who may be in trouble.

But it's not people who were going into the market willy-nilly and were doing irresponsible things. That's number one. And, number two, if you're a homeowner and you're on a street, would you rather have houses empty, grass going, broken windows, people defaulting, or would you rather try to get your block back on track and keep it sound? I ask you ask.

BROWN: So, rising tide lifts all boats kind of a...


RAMIREZ: I think that's really the case, in that you don't want to have more deterioration in your neighborhood and the value of real estate.

It is a sacred asset that most, you know, people in the U.S. have, and I think everything has to be done in order to stabilize the value of those homes.

BROWN: Maria Fiorini Ramirez, appreciate your time.

RAMIREZ: Thank you.

BROWN: And "Fortune" editor Andy Serwer, as always, good to see you.

Thanks, guys. Appreciate it.

SERWER: Thanks, Campbell.

Andy, I know you actually are going to stick around with us for another subject to come.

We know how hard Wall Street has been hit by the recession. Tonight, we are following the ripple effects of one Wall Street layoff to a suburb 50 miles away.

We will explain when we come back.


BROWN: So, when it comes to the economy, obviously, we're all in this together. What happens to the other guy can end up having a drastic effect on you, your money, even your job.

And we're looking at those ripple effects all across the country.

Tonight, we focus on Wall Street. OK. OK. We get it, laid-off bankers not the most sympathetic characters these days, but just look at the ripples from one man's story.

Here's our Randi Kaye.


RANDI KAYE, CNN CORRESPONDENT (voice-over): Last spring, this senior vice president of Lehman Brothers was suddenly out of work.

MICHAEL CREHAN, FORMER LEHMAN BROTHERS EXECUTIVE: We always think that it never -- it's never going to happen to you.

KAYE: That news, that surprise for 54-year-old Michael Crehan triggered a ripple effect stretching all the way from New York to Indiana.

Not long after Lehman closed its doors, so did Michael's favorite deli. That's just ripple number one.

CREHAN: Well, it was across the street from Lehman. I would get, like, my tuna sandwich and some chips.

KAYE: In its place now, a new restaurant with a worried owner.

YASIM ZAKI, OWNER, CAFE GROPPI: We've got 14 people working but as the business is going, find out it's not that great so we still (ph) laying off the people. Now, we end up with like six people.

KAYE: The ripple next hit Michael's gym, the New York Sports Club. After he lost his job, he canceled his $90 a month membership. Now, Michael takes walks with his wife and works out at home.

(on camera): The ripple continues here at Michael's home in Connecticut about an hour outside Manhattan. Michael was paying about $400 a month to keep his lawn looking good. But after he lost his job, he canceled his regular lawn service. Now, Michael takes care of the lawn himself.

(voice-over): We didn't have to look far to see where else the ripple was spreading. Like many commuters to Wall Street, Michael no longer takes the train to New York. So he's not spending $300 a month. That hurts the rail service.

Michael, like so many others, is no longer flying for business either, and that's crippling the airport car services. His driver told me business is down almost 40 percent.

(on camera): Have any of your drivers left?

BEN ENAYE, OWNER, POST ROAD LIMOUSINE: There are some of them who just are not working anymore because it's almost like not worth it, you know? It just wasn't worth their while to come out for one or two jobs.

KAYE (voice-over): Even Michael's alma mater, Notre Dame, won't be getting a check from him this year. He used to give them a few thousand dollars, another ripple. The only family member unaffected by his unemployment is the dog. Michael's wife, Joanne, says there will be no cutting back on the groomer.

CREHAN: I may have to delay my haircuts, but the dog will keep getting hers.

KAYE: Michael still has a sense of humor. Sure, there are some dark days but being out of work has allowed him to spend more time with his wife and reconnect with friends. Michael got some severance and he and his wife also have money saved. CREHAN: We had a cushion, a cash cushion because of savings we had for the rainy day. And sure enough, the rainy day came.

KAYE (on camera): What would you say the silver lining is?

CREHAN: Things aren't great for us, but we're so much better off than a lot of people. There are a lot of people that get laid off that have no severance, that don't have any health insurance, and they may have sick kids. I mean, they may have health issues and bills they have to pay so we've got, you know, healthy children that are doing well.

KAYE (voice-over): To Michael, that is worth more than any job ever could be.

Randi Kaye, CNN, Fairfield, Connecticut.


CAMPBELL BROWN, CNN ANCHOR: And I want to bring back right now "Fortune" magazine's Andy Serwer.

And, Andy, we just saw one man's story here, but multiply that by the kinds of job losses we're seeing around the country and there is a real ripple effect.

ANDY SERWER, "FORTUNE" MAGAZINE: Eleven and a half million people are unemployed in this country, Campbell, and it is true that if you extrapolate and take all of those haircuts, car rides, plane rides, vacations, trips to Starbucks, it really adds up. And you can see why the economy is in the situation that it's in right now, because, you know, you take that and you can just see, it just peels away in all these different kinds of businesses.

BROWN: I want to move on. A lot of people on Wall Street didn't abuse the system. Some did though.

SERWER: Right.

BROWN: And they are getting a lot of attention, like the people at Merrill Lynch. And this is a report in today's "Wall Street Journal." Merrill's top ten earners took home $209 million in 2008, most of it in bonuses. The top three employees earned $30 million to $40 million apiece. And this is while the company was cratering.


BROWN: How does this happen?

SERWER: It's unfathomable. I mean, it's shocking. It's horrible, it's sick, it's disgusting.

I mean, these guys were used to making tremendous amounts of money, tens of millions of dollars, but this was while they were providing huge amounts of revenue for the firm while the firm was doing well. How they managed to get this kind of money while the firm is cratering, as you said, and right before they were bought by Bank of America, is unconscionable. And, you know, in fact, the New York State attorney general, Andrew Cuomo, we just learned is subpoenaing some of these executives and calling them into question about this.

BROWN: But that there's problems here. We talked about it on the show that, you know, it's not against the law to be greedy.

SERWER: Right.

BROWN: And it feels like there's very little that can be done about this in retrospect.

SERWER: There is. I mean, you know, I think they'll have a hard time showing any criminal actions by these individuals. And then, of course, clawing back the money, the claw back, as they say on Wall Street, is next to impossible. You know, I think going forward, you know, sunlight is the best disinfectant and this public outrage and us talking about it right now on this program will probably inhibit companies and individuals from taking this kind of money out during a time when the companies are doing so badly.

BROWN: All right, we'll see what happens.


BROWN: Andy Serwer, appreciate it, Andy, as always.

SERWER: Thanks, Campbell.

BROWN: With $787 billion stimulus dollars flowing out of Washington, we have promised you that we will follow the money. Tonight, that takes us to South Carolina where President Obama says his plan will create or save 50,000 jobs. So why is the governor there threatening to say no to the money? We're going to get to the bottom of it. NO BIAS, NO BULL when we come back.


BROWN: Tonight, we continue our pledge to follow the money pouring out of Washington these days, money that's supposed to get our economy back on track.

Well, one of most outspoken critics of the president's stimulus plan is South Carolina's Republican governor, Mark Sanford. He may actually send back some of the money heading to his state and that is not sitting well with a lot of people down in South Carolina. Today, Sanford met with state lawmakers behind closed doors to make a final decision.

And national political correspondent Jessica Yellin is here to help us follow the money.

And, Jessica, I know turning down money, not something we hear often. Is this just politics? I mean, how much money is the governor really thinking about sending back? JESSICA YELLIN, CNN NATL. POLITICAL CORRESPONDENT: A whole lot of money, Campbell. First of all, the governor opposed the whole idea of a stimulus on principle because he says if he accepts all that money it's going to end up costing his state more in the long run. So now, here are the numbers.

South Carolina is poised to get about $8 billion in stimulus money. Sources in the governor's office say that he believes that he can personally choose to send back up to $750 million. And some in Washington say he can actually control much more.

Now, already sources tell me that the governor is all but certain to reject $60 million to $90 million. It would go to expanding unemployment insurance.

Well, mayors and state legislators, of course, they say they're looking for ways to work around Governor Sanford to get their hands on that money. And meantime, some governors in other states like Arnold Schwarzenegger and Jennifer Granholm, they say they're happy to take whatever money South Carolina doesn't want. They say, bring it on -- Campbell.

BROWN: Jessica, the girl sitting next to Michelle Obama, this was during the president's speech to Congress just last week, she was from South Carolina. And the president said her school would get help. Is that still going to happen?

YELLIN: Yes, maybe not, Campbell. Her school is 200 years old. It is falling apart and her county doesn't even have enough money to start or rebuild.

Governor Sanford, in her state, controls about $126 million in stimulus money that he could spend on things like school reconstruction. He could rebuild her school, but his office tells me they might even reject that money -- Campbell.

BROWN: Jessica Yellin for us tonight. Jessica, thanks.

Some incredible new video has just arrived here at CNN. A train slamming into a tractor trailer, slicing it in half. Then the dust settles and we couldn't believe what happened next. Wait when we come back.


BROWN: Joe Johns joining us right now with the headlines. He has "The Briefing" tonight -- Joe.

JOE JOHNS, CNN NATIONAL CORRESPONDENT: Campbell, we've got new developments in the search for two NFL players lost at sea since the weekend. Responding to an appeal from the men's families, volunteers in private boats and planes continued the hunt today for former Detroit Lion Corey Smith, Oakland Raiders linebacker Marquis Cooper, and William Bleakley. The Coast Guard called off the official search yesterday. Doctors say that a Connecticut woman attacked by a 200-pound chimp may never recover. Charla Nash was severely injured when the chimp mauled her two weeks ago, and surgeons say she may be permanently blind and brain damaged.

In Mexico, a prison riot left 20 people dead and 15 wounded today. Some 500 police and 50 soldiers were called to the prison in the border town of Juarez, next to El Paso, Texas. Authorities blame drug gangs for the deadly violence.

Cameras aboard the Cassini spacecraft have discovered another tiny moon orbiting Saturn. The moon is about a third of a mile across and may be the main source of the planet's outermost ring as well as a mysterious partial ring.

In a modern twist on the ancient tradition of fasting for Lent, some bishops in Italy are calling for Roman Catholics to give up everything from their iPods to surfing the Web to text messaging.

And we're just getting in video of a miracle crash in Turkey a few days ago. You've got to see this. In the southern port city of Mersin, a train hits a 19-wheeler, cutting it in half, and, incredibly, a security guard and the driver escaped with no serious injuries.

Quite a picture, Campbell.

BROWN: All right, Joe Johns for us tonight. Joe, thanks very much. Appreciate it.

Larry King has got more of those -- more on the details about those pro football players missing at sea that Joe was just talking about a second ago.

Larry, who are you talking with tonight?

LARRY KING, HOST, "LARRY KING LIVE": Yes, Campbell. We've got families of two of the NFL players missing at sea. They're going to join us. They're speaking exclusively, by the way, to us as their own search for the men goes on.

And then we'll look into a custody case that spans an ocean and has the high-profile support of Secretary of State Hillary Clinton. All next on "LARRY KING LIVE," Campbell.

BROWN: All right, Larry, thanks. We'll be watching.

And when a small city runs low on money, something has got to give. But what happens to the citizens when the thing that goes away is the health department?


UNIDENTIFIED FEMALE: We had things in town to offer them, and I was really proud of all of this. And now I have no place to -- to turn it over. (END VIDEO CLIP)

BROWN: Well, anybody who doesn't have insurance be out of luck. That story is another part of our ripple effect tonight. We'll have it for you when we come back.


BROWN: Breaking news just coming in right now to CNN. A spokesman at Methodist Hospital in Houston, Texas, tells us that former first lady Barbara Bush had heart surgery today.

We obviously expect to hear more from the Bush family. We're working on getting more details for you, and we'll bring them to you as soon as possible.

But again, former first lady Barbara Bush had heart surgery. This happened today at Methodist Hospital down in Houston. We'll update you as soon as we know more on her condition and how she's doing.

We are moving on now. Health care is one of the nation's top priorities but in the midst of our financial crisis, even that is suffering. Some small towns are cutting services to save money. To stay in the black, one community cut something a lot of folks depended on.

In Amesbury, Massachusetts, city leaders shut down their health department. Tonight, a look at the complications hitting that community. Now residents are scrambling to find medical care.

CNN's senior medical correspondent Elizabeth Cohen joins us with more ripple effects of the economic crisis -- Elizabeth.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Campbell, Amesbury, Massachusetts, is a small city, 16,000 people, but they have a huge budget deficit. $800,000 deficit. So last week, the people of the public health department -- there were just three of them, they packed up their bags. They no longer have jobs. The health department, as it was, no longer exists.

Now, what did the health department do? They had a lot of different things that they did in this community. Let's take a look at three of them.

They supplied vaccinations for children, for poor people, for people who couldn't afford them. They also gave care to the indigent, to the homeless, to people who are uninsured. And also, they tracked diseases. They tracked diseases to make sure to see who was getting sick, where in the city people were getting sick.

Well, now, those services will no longer be offered by the health department. We caught up with Terry Arsenault (ph), the public health nurse who just lost her job. Let's hear what she has to say.

(BEGIN VIDEO CLIP) UNIDENTIFIED FEMALE: We had things in town to offer them, and I was really proud of all of this. And now I have no place to -- to turn it over.


COHEN: Now, the mayor of Amesbury says that he is going to still manage to do the services that the health department used to do by doing it in a less expensive way. Let's hear what the mayor has to say.


MAYOR THATCHER KEZER, AMESBURY, MASSACHUSETTS: We have put in place contractors who do the inspectional services and do the functions that we need for the -- really, the routine-type of programs. So we're regionalizing the way we deliver the services.


COHEN: But, Campbell, I'll tell you a lot of people in Amesbury, Massachusetts, tonight, say they're going to try to do it on the cheap and that they're not going to be offering the same services that the Department of Public Health in Amesbury used to offer -- Campbell.

BROWN: And as we've been talking about all night tonight, Elizabeth, the health department was small but closing it has a huge ripple effect.

COHEN: That's right. It definitely does.

Let's take a look, for example, at two ripple effects that could happen here. When people who used to get care at the public health department may now be getting it from the emergency room, we know how expensive that is.

So, for example, let's say you used to go to the Amesbury public health department for your flu shot. Well, let's say next year you're not going to get it from them. You don't know where to get it. Perhaps you don't have enough money, you don't have a doctor. What happens is that you might get the flu if you don't get a flu shot. You'd end up in the emergency room because you don't have a doctor.

Well, a visit to the E.R. for the flu can cost hundreds if not thousands of dollars. And, Campbell, let me give you one more example.

The Public Health Department used to arrange for people -- for senior citizens to get taxis when they were ill to go to the doctor at the hospital. Well, the fear is that program is going to end and now some of those sick senior citizens will take an ambulance instead to go to that same emergency room. That's $400 to take an ambulance to the emergency room, a difference of $385. So, there you see another ripple effect.

BROWN: And I know closing the health department also has an impact on emergency rooms. That's something that we all end up paying for.

COHEN: That's right. That is something. You and I and everybody else end up paying for.

For example, Campbell, the kind of insurance that you and I have, it's estimated that $1,000 of our insurance premiums every year go not to taking care of us and our families, but go to taking care of the uninsured. All of our premiums go up when there are people who are uninsured.

And, Campbell, I've been talking to emergency room doctors across the country and they said that ever since all of these layoffs have been happening they've been seeing more and more people in the emergency room because they no longer have insurance.

BROWN: And one more ripple, I know rising health care costs do hurt small businesses. Explain that for us.

COHEN: Right. This is the concern that you have more people, people who used to use the public health department now go to the emergency room. That brings the costs up for everyone.

Small businesses say that they are suffering. Their premiums, they say, have gone up 113 percent in the past ten years and many of them are just saying, hey, you know what? We can't afford to insure our employees anymore and they're just pulling away the insurance.

BROWN: All right. Elizabeth Cohen for us tonight. Elizabeth, thanks. Appreciate it.

They will soon be swinging at the White House, at least the Obama girls will. We've got a new addition to the White House in our "Political Daily Briefing" when we come back.


BROWN: Congressional Democrats finally get their wish today. They will soon hear from Karl Rove live and in person. That's in tonight's "Political Daily Briefing."

Erica Hill here with the latest. What is the latest?

ERICA HILL, CNN CORRESPONDENT: Oh, boy, on this one. They've been waiting for this for a long time.

The head of the Senate Judiciary Committee calls this truth seeking. Translation here, the members of Congress want to know whether anyone in the Bush administration abused their power, including using torture as a means for interrogation.

Now, the Bush administration repeatedly denied ever engaging in torture but a Judiciary Committee is holding bipartisan hearings on the subject today. And its chairman, Senator Patrick Leahy, has vowed to follow through on the investigation.

Over on the House side, there is another judicial matter. Former White House political adviser Karl Rove and Counsel Harriet Miers agreeing now to give depositions about improper political influence at the Justice Department. So that is where we will be hearing from Karl Rove, Campbell.

BROWN: A lot to pay attention to there. We'll stay tuned to see what happens. I also understand that there is a new knight in town.

HILL: There is a new knight in town. He's been granted plenty of accolades here in the U.S.

Senator Ted Kennedy, though, now being recognized by the Queen of England as an honorary knight for his service to American-British relations and his work in Northern Ireland.

Now, this is the highest honor the U.K. can bestow on a non- citizen. It does stop short, though, of a new title for the senator. You see "sir" can only be used for Brits, and someone may want to tell that to the prime minister.


GORDON BROWN, BRITISH PRIME MINISTER: I want to announce awarded by Her Majesty the Queen, on behalf of the British people, an honorary knighthood for Sir Edward Kennedy.


HILL: Just to be clear, though, no sir for the senator, though he can add three other new letters to this name, KBE at the end, which stands for knight commander of the most excellent order of the British empire. That makes him Senator Edward Kennedy, KBE.

In a statement, he called the honor moving and personal saying, "I accept this honor in the spirit in which it is given, with a continuing commitment to be a voice for the voiceless and for the shared ideals of freedom and fairness which are so fundamental to the character of our two countries."

And among the other honorary knights here in the U.S., former secretary of state Colin Powell, Senator John Warner, filmmaker Steven Spielberg, Bill Gates, and former New York City mayor Rudy Giuliani.

BROWN: Hmmm, interesting.

Totally different subject, though, that we must discuss, new equipment at the White House.

HILL: Yes, let's get to the important stuff here. There is a swing set now on the White House ground. It's going to be right out behind the Oval Office, so the president can keep an eye on the first daughters.

We can tell you this, 100 percent cedar, North American redwood. There are four swings, a tire swing, a slide, a fort, climbing wall, a picnic table and brass plates with the names of all 44 presidents.

BROWN: Really?

HILL: Yes. Apparently the girls ran straight out to it.

BROWN: Your little guy would go crazy.

HILL: He would love it. So with yours, I think.

BROWN: Erica Hill for us tonight. Erica, thanks.

We'll be right back.


BROWN: More details on tonight's breaking news. Former first lady, Barbara Bush, as we told you had heart surgery today. A spokesman for the Bush family telling CNN affiliate KTRK that the surgery was a precautionary step after doctors found hardening on one part of her aorta. The 88-year-old Mrs. Bush suffered some shortness of breath last week. We will keep you updated on her condition.

"LARRY KING LIVE" starts right now.